A 20-year-old court precedent that has blocked Colorado cities and towns from forcing developers to build affordable housing in new rental projects is no more, after Gov. Jared Polis signed a bill into law Friday.

“Communities are strongest when people who work in a community can live in the community, and that’s something that sadly we have been losing,” said Polis, a Democrat, at a bill signing ceremony Friday.

House Bill 1117 modifies state land use statutes so local governments can require below-market-rate units in new or redeveloped rental projects without running afoul of the state’s rent-control prohibition. It reverses the effects of a 2000 Colorado Supreme Court ruling that restrained local governments for years.

The law comes as Colorado communities, from Front Range urban cities to mountain towns, are facing an unprecedented housing crisis. Colorado has added nearly 1.5 million people in the past two decades, and, as more demand drives up housing prices and new construction lags, it’s largely low- and moderate-income workers who are priced out of housing.

“We know that local governments have been begging us for the tools to be able to encourage more local affordable housing to be built. This bill is a tool to address the affordable housing crisis and to combat gentrification,” said state Sen. Julie Gonzales, a Denver Democrat and prime sponsor of the legislation, at the bill signing.

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